Anxiety over Q2 depresses Markets; BSE Sensex down 156 Points

Mumbai, Oct 12: Investor-anxiety over the ongoing quarterly results season subdued Indian equity markets leading to a barometer index shedding 156 points or 0.58 percent during the mid-afternoon session on Monday.

Initially, both the Indian bellwether indices opened in the green on the back of positive Chinese markets. However, both indices soon ceded their gains, as investors were spooked regarding the uncertainty over the second quarter results. Notwithstanding the downward trend, hopes of healthy macro data points on industry output and inflation later in the day somewhat arrested the fall.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) was also trading in the negative territory. It was lower by 38.55 points or 0.47 percent at 8,151.15 points. The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE), which opened at 27,242.60 points, was trading at 26,923.18 points (at 2.45 p.m.) — 156.33 points or 0.58 percent down from its previous close at 27,079.51 points. The BSE Sensex has so far touched a high of 27,305.04 points and a low of 26,904.05 points in the intra-day trade. The barometer index had closed with gains of 233.70 points or 0.87 percent on October 9, the last trading day.

Analysts pointed out that the markets were trading marginally in the red due to the uncertainty over the second quarterly results, which might be below expectations due to currency fluctuation and slowing demand scenario.

“Positive Chinese indices gave a steady opening to the markets here which made early gains. However, the markets soon receded on the back of investors’ anxiety over the quarterly results and rise in the oil prices which are expected to sustain,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told.

The results season was kicked off from October 5. Infosys was the first bluechip to come out with its results on Monday. The global software major reported net profit of Rs.3,398 crore for second quarter registering a 9.8 percent growth year-on-year (YoY) and 12 percent on a sequential basis.

“Apart from stock-specific action, the markets have no clear trigger on the possible government reforms. This has been a dampener. However, expectations of healthy macro numbers have stopped the markets from going into a free fall,” James added.

The factory output data for August and inflation figures for September will be released on Monday evening. Both the key data points will give future guidance to the Reserve Bank of India’s next move on lending rates.

Nitasha Shankar, vice president, research with YES Securities, told: “Metal stocks continue to dominate in trade, while Tech and FMCG stocks are under pressure pulling down the Index. Broader markets are trading with marginal gains.

Sector-wise, information technology (IT), healthcare and technology, entertainment and media (Teck) came under intense selling pressure. However, metals, capital goods and banks indices witnessed healthy buying support.

The S&P BSE metals index increased by 86.60 points, capital goods index gained by 72.11 points and banking index was higher by 43.49 points. On the other hand, The S&P BSE IT index plunged by 192.27 points, healthcare index receded by 188.33 points and Teck index declined by 95.09 points.